Downward Pressure Fear and Uncertainty on Ethereum is Due to Waning Holders

By Maheen Hernandez September 8, 2019 Off

Ethereum will be launching the Testnet vide a system-wide upgrade.

E.G. Galano, the chief infrastructure engineer of Infura, an Ethereum startup stated, “One of the lessons learned in the [previous] Byzantium fork last year is that we shouldn’t try to set the test net and main net fork at the same time,” further stated, “Let’s start with setting the testnet fork and see how that goes and find a period of stability before revisiting when to set the mainnet fork.”

A lot of fear and uncertainty has been spread regarding Ethereum, the No.2 cryptocurrency pointing to its scaling issues. The criticism is genuine, and Ethereum is struggling due to network congestion, and the utilization is above 94 percent.  Therefore, it is becoming costly to run applications. However, the biggest weakness of the ETH network is also its source of strength.

The reason for the network congestion is because there are a lot of developers building their decentralized applications (DApps) on the blockchain network.  The scaling issue is not permanent, and the ETH community has a solution, and they have defined a timeline in place.

The Ethereum is experiencing a buying interest near the $165 level versus the dollar.  The price is currently going higher, and it is testing significant resistance near $180 and $182.  A break was noted above the significant bearish trend line, and resistance was seen on the 4-hour chart at $176 of ETH/USD. A few bullish signs were seen indicating an upside break above the resistance at $182.

The price of the Bitcoin continues to be well bid, and it is gaining traction above $10,500 resistance.  A swing low was seen at $165, and the price went a little higher.  A $175 strength was recognized with the 50% Fib retracement level during its last decline from the $183 high and $165 swing low.  The pair is currently trading with a positive bias beyond the $175 level.

Ethereum continues to dominate when it comes to the number of developers.  The runners up in this regard are too far.  The developer ecosystem of Ethereum is four times more than that of Bitcoin.  The Ethereum community considers this as necessary as they believe it contributes to the most value.

Scott Melker, Wolf of All Streets, stated, “Price has found support in the green demand zone and is presently working towards breaking descending (dashed) resistance. A move through that line would indicate likely further price appreciation.”

The downward pressure on Ethereum is due to waning holders.  While the Ethereum has bounced from daily lows, the downtrend might just be getting started.